Mba Market Segmentation Meaning- Market segmentation is a technique of dividing the market of a product in order to capture more and more sales. Under this technique, customers of a product are divided into several homogeneous groups on the basis of their common characteristics. The concept of market segmentation is based on the fact that markets of all the commodities are heterogeneous. For every product, there is a group of customers having different nature, habits, hobbies. incomes and attitudes. Two customers are never common in all respects. On the basis of their characteristics customers may be divided into several groups. These groups are formed on the basis of some similar qualities and such divisions are called market segmentations. The term ‘Market segmentation’ has been defined requirements and characteristics by several authors as follows:
Market segmentation is the sub-division of a market into homogeneous subsets of customers, where any subset may conceivably be selected on a market target to be reached with a distinct marketing mix. -Philip Kotler
Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which, tends to be homogeneous in all significant aspects -William J. Stanton
Markets may be classified into several ways depending on the customer’s characteristics. Customers may be grouped on the basis of how they use a product or service. This grouping of customers can also be broken up in terms of age, sex, income level, education or geographically in terms of sales territories. This grouping of buyers on segmenting the market is described as market segmentation -Rustom S. Daver
“Market segments are grouping of consumers according to such characteristics as income, age, degree of urbanisation, race or ethic classification, geographic location or education. -Cundiff and Still
” On the basis of analytical study of above definitions, it can be observed that market segmentation is the art of dividing the customers of a product into several homogeneous groups on the basis of their common characteristics, such as income, age, education, race, sex, profession, geographic location, etc. The aim of market segmentation is to prepare different programmes and strategies for all segments, so that maximum satisfaction may be provided to all the consumers of these segments and the object of earning maximum profits may be achieved. Mba Market Segmentation Meaning
Purpose of Market Segmentation
The customers of a product are found in quite a large number. All the customers have different characteristics and no two customers have similar characteristics. The reason of such a difference is the difference of characteristics extent. Therefore, a successful marketing manager is one who understands and considers different characteristics of the customers of his products for making the products more popular and for providing maximum possible satisfaction to the maximum possible customers. The customers of a product are divided into several groups. These groups are formed on the basis of similarity of characteristics.
The purpose of market segmentation is to determine the difference among the purchasers which may affect the choice of market area or marketing methods. –Prof. Esmond Pearce
The purpose of market segmentation is to determine difference among the buyers which may be consequential in choosing among them or marketing to them.
Thus, it can be concluded that the object of market segmentation is to determine the differences among the purchases of a product and to divide these purchasers on the basis of these differences into several groups, so that different marketing programmes, policies and strategies may be prepared for every group of consumers and maximum satisfaction may be provided to maximum consumers and the object of earning of maximum profits may be achieved. Mba Market Segmentation Meaning
Importance of Market Segmentation
Importance of market segmentation can be explained as under:
- Best Utilisation of Available Resources: Market segmentation makes it possible for the enterprise to make the possible utilisation of its available resources. The process of market segmentation divides the market into several groups of consumers. The enterprise may adjust its marketing activities according to the needs and circumstances of these segments. More resources may be allocated to the segments in which there are more possibilities of selling the products and less resources may be allocated to the segments in which there are less possibilities of selling the products.
- To Discover Marketing Opportunity: Market segmentation helps in making intensive marketing research in all the segments. The habits, tastes, hobbies and nature of consumers of all the segments can be understood deeply. Such research helps in discovering marketing opportunities in these segments. 3. Helpful in Competition: Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors for all the segments. It helps in the formulation of marketing policies and determination of marketing programmes, so that the competition may be faced successfully.
- Evaluation of Marketing Activities: On the basis of market segmentation, different marketing programmes are prepared for different segments. These marketing programs set the standards for Individual segments. Actual results of these segments can be measured and compared with the respective standards. Thus, market segmentation helps in the evaluation of marketing activities in different segments It concludes that in which particular segment, the marketing activities are successful and in which particular segment, these activities are not successful.
- To Prepare Sound and Effective Marketing Programme: Market segmentation divides the whole market into several segments and individual marketing programmes are prepared for every segment. These programmes are better and more effective than a single programme for the whole market.
- Increase in Sales Volume: Market segmentation helps in increasing the volume of sales of the enterprise. It is based on the fact that multiple demand curves in a market are better than a single demand curve. Since, market segmentation helps in better identification of the needs and wants of consumers. special efforts may be made to penetrate market segments deeply and thoroughly. It helps in increasing the sales volume of the enterprise.
The discussion makes it clear that market segmentation is very useful for a business and industrial enterprise. It divides the whole market of the enterprise into several groups and make it possible for the enterprise to make particular effort for a particular segment. Mba Market Segmentation Meaning